Phillips Getschow v. Green Bay Brown County

• Decision Date: 02 January 2003
• Docket Number: No. 02-C-437.,02-C-437.
• Citation: 270 F.Supp.2d 1043
• Parties: PHILLIPS GETSCHOW COMPANY, Plaintiff, v. GREEN BAY BROWN COUNTY PROFESSIONAL FOOTBALL STADIUM DISTRICT, Lambeau Field Redevelopment, LLC, and Turner Construction Company, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

270 F.Supp.2d 1043

PHILLIPS GETSCHOW COMPANY, Plaintiff, v. GREEN BAY BROWN COUNTY PROFESSIONAL FOOTBALL STADIUM DISTRICT, Lambeau Field Redevelopment, LLC, and Turner Construction Company, Defendants.

No. 02-C-437.

United States District Court, E.D. Wisconsin.

January 2, 2003.

Gregory B Conway, Liebmann Conway Olejniczak & Jerry, Green Bay, for Green Bay Brown County Professional Football Stadium District, Lambeau Field Redevelopment LLC, Turner Construction Company, Defendants.

Philip J Danen, Stellpflug Janssen Nell Hammer, Kirschling & Bartels, De Pere, for Phillips Getschow Company, Plaintiff.

G. Michael Halfenger, Foley & Lardner, Milwaukee, for Green Bay Brown County Professional Football Stadium District, Lambeau Field Redevelopment LLC, Turner Construction Company, Defendants.

Eric L Maassen, Foley & Lardner, Milwaukee, for Green Bay Brown County Professional Football Stadium District, Lambeau Field Redevelopment LLC, Turner Construction Company, Defendants.

Thomas L Shriner, Jr, Foley & Lardner, Milwaukee, for Turner Construction Company, Green Bay Brown County Professional Football Stadium District, Lambeau Field Redevelopment LLC, Defendants.

DECISION AND ORDER

GRIESBACH, District Judge.

This action arises out of the renovation of Lambeau Field. A company that bid on the heating, venting and air conditioning contract but was not awarded the work has sued the entities in charge of the renovations, asserting improprieties in the bidding process. Defendants now contend that the only federal claim in the lawsuit should be dismissed. I agree, and order the federal claim and its state counterpart dismissed. And since the remaining claims arise solely under state law and there is no diversity of citizenship, I conclude that federal jurisdiction over them is lacking and that they too should be dismissed.

I. FACTUAL AND PROCEDURAL HISTORY

Plaintiff Phillips Getschow Company filed this case in this court on April 30, 2002, alleging several state law claims and, more importantly for present purposes, a federal antitrust claim. According to the complaint, defendant Green Bay Brown County Professional Football Stadium District ("District") is a Wisconsin municipality created specifically for the project of renovating Lambeau Field. Defendant Lambeau Field Redevelopment, LLC ("Developer"), acting on behalf of the District, contracted for the design and construction of the Lambeau Field renovations. Defendant Turner Construction Company is the designer and general contractor of the renovations.

Phillips asserts that the Lambeau Field renovations project is a "public contract" under Wis. Stat. § 66.0901(1), which provides for a closed bidding system whereby bids are not opened until all bids are in and a bidder may only withdraw its bid and rebid upon the project if the project is readvertised. The defendants allegedly represented to Phillips that the Lambeau Field renovations bidding was to be closed, that bid amounts were not to be disclosed until a contract was awarded, and that the lowest bid was to be accepted by the defendants.

Phillips submitted a bid for bid package No. 6 HVAC & Temperature Control. Phillips's bid was allegedly the lowest bid submitted for that bid package. According to the complaint, however, the defendants "opened the submitted bids and disseminated the information contained within the submitted bids to certain contractors, and those contractors were improperly allowed to submit a new and lower bid." (Compl.¶ 17.) In other words, the defendants "informed an invited bidder to withdraw its previously submitted and opened bid ... [and] informed this same invited bidder of the lowest bid received by the defendants for the bid package." (Id. ¶¶ 22-23.) The "invited bidder" then was allowed to submit a new bid that matched or was lower than Phillips's bid, and the "invited bidder" was awarded the bid package. (Id. ¶ 24.)

The only federal claim in the complaint is count III, which alleges federal (and state) antitrust violations. Count III alleges that

[t]he defendants' conduct in opening the submitted bids and disseminating the information contained within the submitted bids to certain contractors, and allowing those contractors to submit new and lower bids violates The Sherman Antitrust Act, 15 U.S.C. 1, et seq., and state antitrust laws in that defendants'] conduct was an unreasonable restraint of trade, designed to eliminate competition and otherwise adversely affect the free market.

(Id. ¶ 32.) Phillips allegedly suffered damage in the form of its expense in preparing and submitting its proposed bid, "which, in the ordinary course of business and absent the defendants' illegal conduct, would have resulted in the award of the project, business income and future maintenance to the plaintiff." (Id. ¶ 33.) Phillips seeks treble damages, attorney fees, and costs.

Defendants have filed a motion to dismiss the federal and state antitrust claims with prejudice under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. They also seek dismissal of the remaining state law claims without prejudice under Fed.R.Civ.P. 12(b)(1) for lack of jurisdiction or under 28 U.S.C. § 1367, the supplemental claims statute.

II. DISCUSSION

A. Antitrust Claims

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(6). Dismissal of an action under such a motion is warranted if the plaintiff can prove no set of facts in support of its claims that would entitle it to relief. Gen. Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir.1997); see Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The essence of a Rule 12(b)(6) motion is not that the plaintiff has pleaded insufficient facts, it is that even assuming all of his facts are accurate, he has no legal claim. Payton v. Rush-Presbyterian-St. Luke's Med. Ctr., 184 F.3d 623, 627 (7th Cir.1999).

Unreasonable restraints of trade are prohibited by The Sherman Act, 15 U.S.C. § 1, which reads in pertinent part: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal." Under § 1, such an illegal restraint of trade is a felony.

While § 1 literally prohibits every agreement in restraint of trade, the United States Supreme Court has read § 1 to prohibit only restraints that violate the "rule of reason," i.e., practices that under all the circumstances impose an unreasonable restraint on competition. Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 342-43, 102 S.Ct. 2466, 73 L.Ed.2d 48 (1982). Because rule of reason analysis may entail significant litigation, the Supreme Court has also recognized per se violations of § 1. Id. at 343-44, 102 S.Ct. 2466. "Once experience with a particular kind of restraint enables the Court to predict with confidence that the rule of reason will condemn it, it has applied a conclusive presumption that the restraint is unreasonable." Id. at 344, 102 S.Ct. 2466. Per se violations include, for instance, price fixing, division of markets, group boycotts, and tying arrangements. Id. at 344 n. 15, 102 S.Ct. 2466.

A violation of § 1 is not enough by itself, however, to support a civil lawsuit for restraint of trade. Although not specifically cited by Phillips in its complaint, 15 U.S.C. § 15, also known as § 4 of the Clayton Act, is the required vehicle for a civil lawsuit for restraint of trade or other antitrust violations. Under § 15(a), "any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States." In Brunswick Corp. v. Pueblo Bowl-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), the Supreme Court held that § 15(a) creates an additional element for a civil claim based upon an alleged antitrust violation. A plaintiff

must prove more than injury causally linked to an illegal presence in the market. Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation.

429 U.S. at 489, 97 S.Ct. 690; see also Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 109, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986) (summarizing Brunswick Corp.).

An antitrust injury does not arise "until a private party is adversely affected by an anticompetitive aspect of the defendant's conduct," Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 339,110 S.Ct. 1884, 109 L.Ed.2d 333 (1990), i.e., "a plaintiff can recover only if the loss stems from a competition-red-reducing aspect or effect of the defendant's behavior," id. at 344, 110 S.Ct. 1884. As the courts have repeatedly noted, "[t]he antitrust laws ... were enacted for `the protection of competition, not competitors.'" Brunswick Corp., 429 U.S. at 488, 97 S.Ct. 690 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)). In other words, the antitrust laws do not protect a business from a loss of profits to a competitor related to continued or increased competition. Cargill, Inc., 479 U.S. at 116, 107 S.Ct. 484; Stamatakis Indus., Inc. v. King, 965 F.2d 469, 471 (7th Cir.1992) ("[A] producer's loss is no concern of the antitrust laws, which protect consumers from suppliers rather than suppliers from each other. If King's defection should be called unfair competition, it is nonetheless competition."); see Ehredt Underground, Inc. v. Commonwealth Edison Co., 90 F.3d 238, 240 (7th Cir.1996) ("Over and over, we stress that antitrust is designed to protect consumers from producers, not to protect...